Basic HTML Version
Manysportingclubsexist asassociations (either incorporated
or unincorporated) under a constitution and operate in the
belief that the only potential legal hazards might arise
from the state of their playing fields (see Touchline Issue
7 – Focus on Risk Management). However, office bearers
in sporting clubs should be equally aware of the potential
pitfalls within the clubhouse arising from decisions by
the club’s management committee. Disputes between
committee members and club members dissatisfied with the
committee’s decisions or actions have the potential to be
more fiercely (and more expensively) contested than any
of the club’s sporting encounters. Although it is impossible
to completely immunise a club from becoming entangled in
a legal maul, there are some steps that clubs can take to
manage the risks associated with such disputes.
Identifying the risks
In Australia, many club constitutions may be based upon
‘model rules’ provided by state government agencies
responsible for regulating incorporated associations.
However, constitutions are like suits - one size does
not necessarily fit all and clubs that are contemplating
incorporation or drafting constitutions should review the
model rules and consider whether any refinements are
necessary to take into account the nature and scope of the
club’s activities and its potential membership.
For sporting clubs that already operate with an existing
constitution, the members of its management committee
should familiarise themselves with its constitution rather
than tolerating a situation in which the only copy of the
club’s constitution might be sitting in the kitchen drawer of
the person who was president five years previously.
Although not exhaustive, the following issues have the
potential to trip up any management committee just as
readily as an unidentified divot on the club’s playing field:
• Membership –
is the club adhering to its procedures
for the admission, rejection and, if necessary, the
termination of membership?
• Elections
– is the club complying with its procedures
for notice of elections, nominations and voting
procedures for the management committee?
• Functions of the management committee
– is
the committee acting within the powers granted to it
under the constitution (for example raising or borrowing
money)?
• Validity of the committee meeting –
were there
sufficient members of the committee present to
constitute a quorum and allow decisions to be taken?
• Finances
– is the club keeping proper financial
records, adopting appropriate procedures for drawing
cheques and preparing financial statements?
The above list is not intended to be exhaustive but to indicate
some of the areas of club operations which may trigger
disputes and potentially, litigation.
Managing the risks
Like any other risk management exercise, the first step to
risk management is identifying the potential risks. The list
set out above should assist a club in identifying the areas in
which its operations could give rise to disputes or litigation.
The club should also review its insurance arrangements to
assess whether its insurance policies will respond to the
risk by providing cover for the club’s directors and officers
in the event of such disputes arising. The policy wording,
particularly the definitions of the risks being insured against,
should also be reviewed to ensure that they meet with the
club’s needs.
CONSTITUTIONAL
DISORDERS
SPORTING CLUBS MUST BE AWARE OF THE POTENTIAL LEGAL HAZARDS THAT CAN
ARISE DUE TO DISPUTES BETWEEN COMMITTEE AND CLUB MEMBERS, WRITES
JAMES MCINTYRE
, SPECIAL COUNSEL WITH DLA PIPER AUSTRALIA.
touchline
20
Through Legal Eyes